Budget 2017: The $4b question over Cyclone Debbie

by ojacques

Owen Jacques
News Editor

Owen Jacques is an award-winning investigative journalist from Mackay, now based on the Sunshine Coast as APN Australian Regional Media’s Online News Editor. He has a strong background reporting on politics, business and breaking news. Owen has also specialised in resources reporting, which included a successful campaign to fight 100% fly-in, fly-out mining in rural Queensland towns.

CYCLONE Debbie delivered flooding rains, devastating winds and paralysed the state. But in its aftermath, it could deliver a windfall worth billions to Federal coffers.

THE catastrophic destruction delivered by Tropical Cyclone Debbie earlier this year is still yet to be fully calculated, with Federal Budget papers warning that the price of repairs and rebuilding across Queensland and New South Wales could punch a hole in the budget.

The enormity of the storm, which struck the east coast on March 28 caused so much disruption that Budget papers suggest it slowed national growth.

It also did tremendous damage to the supply lines that feed steel-making coal to the world.

Cyclone Debbie's impact on the world market was felt swiftly as Queensland's coal suddenly became more scarce. The sudden change in supply pushed coal prices to above US$300 a tonne - almost three times the average.

Thermal coal - used for electricity - has also increased in value.

Although prices are already returning to normal after the storm, the bean counters at Treasury have calculated just how much that spike is worth.

If the price of coal stays at US$200 a tonne for just six months, it is worth $4.4 billion to the national economy and $1 billion in revenue for federal accounts by mid-2019.

However, if the price plummets back down to US$120 a tonne. That extra money vanishes.

The Tropical Cyclone struck Central Queensland, before ultimately striking huge parts of inland Queensland, flooding the Fitzroy River in Rockhampton then delivering huge volumes of rain and devastating winds to south-east Queensland and northern NSW.

Although almost $40 million has already been given to Queensland by the Federal Government in 2016-17 - following floods in September and storms in July - the dollar figure on damage by Cyclone Debbie is likely to dwarf that.

It is also likely to drive up the cost of fruit and vegetables "in the near term" according to Budget papers.

"As a result of these agricultural losses, fruit and vegetable prices are expected to rise."

Beyond the impact of Cyclone Debbie, much of Central Queensland ranked little mention in Budget documents. There was no mention of funding for Rockwood Weir outside Rockhampton, and no mention of Mackay's Ring Road beyond Stage One.

The Walkerston Bypass outside of Mackay will be given a further $45 million funding, pushing the federal contribute to $120 million.

It will also spend $844 million on upgrading parts of the Bruce Highway, but the largest projects are focussed on south-east Queensland, although some will go to general upgrades of the highway.